Our party did not end the unjust and inefficient monopolies of the old nationalised energy corporations only to replace them with a system that traps the poorest customers on the worst deals.”
So said prime minister Theresa May earlier this year. Her comments tell of more than the Conservative party’s new, hard line on energy prices and its promised price cap. They speak of an energy market that is viewed with suspicion by customers, vilified by politicians and the press, and suffering, still, from broken trust with the public.
Energy prices are front and centre of the national agenda once again, with May convinced that promising action will win her votes – just as Labour leader Ed Miliband was at the last election, in 2015. Current Labour leader Jeremy Corbyn has gone even further, pledging to renationalise the water sector and parts of the energy sector if elected. The politicians are not creating the problem with utilities – they’re tapping into an anger that already exists.
Energy companies have long been aware that poor customer service and rising prices has left them with more than an image problem. Indeed, the companies themselves called for a Competition and Markets Authority (CMA) investigation into the industry as far back as 2013, with then-Eon chief executive Tony Cocker speaking for his peers when he told the Utility Week Congress: “Eon has worked very hard in the past two years to improve our transparency and rebuild trust but at the same time, it is clear we are not fully succeeding.
“We have absolutely nothing to hide and we are transparent as we can be, but it would be helpful to have a group of experts to look in from the outside, who don’t have a vested interest in the industry.”
The CMA investigation went ahead, taking two years to come to conclusions that many in the industry take issue with – including its infamous claim that energy customers are being overcharged by £1.4 billion a year. Yet it also concluded that fundamentally, the market was not broken. It stopped short of calling for a universal price cap, limiting such intervention to customers on prepayment meters. Instead, it made a number of recommendations now being enacted by the sector.
Today it is apparent that the CMA didn’t go far enough. The public is still angry with energy suppliers, and politicians are still prepared to exploit that anger to win votes. And this is an issue not just for energy suppliers, as Labour’s manifesto has shown.
Whatever the outcome of the election, the fundamental issue of broken trust will remain. That’s why Utility Week, in association with WNS Global Services (WNS), is launching the Customer Trust Council. The council will work with representatives of energy suppliers and other utilities to ask what has gone so badly wrong – and what the industry can do to fix it.